Globalstar Announces 2015 Fourth Quarter and Annual Results
FOURTH QUARTER FINANCIAL REVIEW
Revenue
Revenue for the fourth quarter of 2015 was
Service revenue increased
Subscriber equipment sales revenue declined
Net Income (Loss)
Net loss was
Adjusted EBITDA
Adjusted EBITDA for the quarters ended
OPERATIONAL AND REGULATORY UPDATE
Second-Generation Ground Infrastructure Update
With support from Hughes Network Systems, our engineering teams have successfully completed the radio access network (RAN) deployments at our gateways in
We are nearing completion of the upgrades of our core network and RAN systems. Site acceptance of the core network equipment at one of our gateways in
FCC Proceeding
Our demonstration at the Commission’s Technology Experience Center last March, as well as the real world deployments in
The Commission has not asked us to provide any further technical data or engage in any additional testing. We believe that the Commission’s focus on competition, innovation, freeing up additional commercial spectrum and expanding broadband for education will help drive a successful conclusion.
ANNUAL FINANCIAL REVIEW
Revenue
Total revenue increased
Net Income (Loss)
Net income was
Adjusted EBITDA
Adjusted EBITDA for 2015 and 2014 were
Mr. Monroe concluded, “Our second-generation gateway upgrades allow the Company to roll out a series of new products. These new products provide affordable connectivity beyond cellular at speeds and prices never seen before in MSS. Finally, regarding our TLPS proceeding, in deference to the deliberative process of the Commission, we will not comment further at this time on the proceeding.”
CONFERENCE CALL
The Company will conduct an investor conference call on February 25, 2016 at
Details are as follows: | |
Conference Call: | 5:00 p.m. ET Investors and the media are encouraged to listen to the call through the Investor Relations section of the Company's website at www.globalstar.com/investors. If you would like to participate in the live question and answer session following the Company's conference call, please dial 1 (888) 771-4371 (US and Canada), 1 (847) 585-4405 (International) and use the participant pass code 41610743. |
Audio Replay: | A replay of the earnings call will be available for a limited time and can be heard after 7:30 p.m. ET on February 25, 2016. Dial: 1 (888) 843-7419 (US and Canada), 1 (630) 652-3042 (International) and pass code 4161 0743#. |
About
Note that all SPOT products described in this press release are the products of
For more information, visit www.globalstar.com.
Safe Harbor Language for Globalstar Releases
This press release contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Forward-looking statements, such as the statements regarding our expectations with respect to actions by the FCC, future increases in our revenue and profitability and other statements contained in this release regarding matters that are not historical facts, involve predictions. Any forward-looking statements made in this press release are believed to be accurate as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and we undertake no obligation to update any such statements. Additional information on factors that could influence our financial results is included in our filings with the
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended | Year Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Revenue: | ||||||||||||||||||
Service revenues | $ | 18,757 | $ | 17,176 | $ | 74,124 | $ | 69,823 | ||||||||||
Subscriber equipment sales | 4,010 | 4,917 | 16,366 | 20,241 | ||||||||||||||
Total revenue | 22,767 | 22,093 | 90,490 | 90,064 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) | 7,393 | 7,742 | 30,615 | 29,668 | ||||||||||||||
Cost of subscriber equipment sales | 2,786 | 3,617 | 11,814 | 14,857 | ||||||||||||||
Cost of subscriber equipment sales - reduction in the value of inventory | — | 14,367 | — | 21,684 | ||||||||||||||
Marketing, general, and administrative | 8,988 | 8,721 | 37,418 | 33,520 | ||||||||||||||
Reduction in the value of long-lived assets | — | 84 | — | 84 | ||||||||||||||
Depreciation, amortization, and accretion | 19,513 | 19,754 | 77,247 | 86,146 | ||||||||||||||
Total operating expenses | 38,680 | 54,285 | 157,094 | 185,959 | ||||||||||||||
Loss from operations | (15,913 | ) | (32,192 | ) | (66,604 | ) | (95,895 | ) | ||||||||||
Other income (expense): | ||||||||||||||||||
Loss on extinguishment of debt | — | (231 | ) | (2,254 | ) | (39,846 | ) | |||||||||||
Loss on equity issuance | (831 | ) | — | (6,663 | ) | (748 | ) | |||||||||||
Interest income and expense, net of amounts capitalized | (9,074 | ) | (9,381 | ) | (35,854 | ) | (43,233 | ) | ||||||||||
Derivative gain (loss) | (1,556 | ) | 132,614 | 181,860 | (286,049 | ) | ||||||||||||
Other | 1,501 | 831 | 3,229 | 3,786 | ||||||||||||||
Total other income (expense) | (9,960 | ) | 123,833 | 140,318 | (366,090 | ) | ||||||||||||
Income (loss) before income taxes | (25,873 | ) | 91,641 | 73,714 | (461,985 | ) | ||||||||||||
Income tax expense (benefit) | 943 | (374 | ) | 1,392 | 881 | |||||||||||||
Net income (loss) | $ | (26,816 | ) | $ | 92,015 | $ | 72,322 | $ | (462,866 | ) | ||||||||
Income (loss) per common share: | ||||||||||||||||||
Basic | $ | (0.03 | ) | $ | 0.09 | $ | 0.07 | $ | (0.50 | ) | ||||||||
Diluted | $ | (0.03 | ) | $ | 0.08 | 0.07 | (0.50 | ) | ||||||||||
Weighted-average shares outstanding: | ||||||||||||||||||
Basic | 1,037,880 | 993,427 | 1,020,149 | 934,356 | ||||||||||||||
Diluted | 1,037,880 | 1,192,263 | 1,230,394 | 934,356 | ||||||||||||||
RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA
(In thousands)
(unaudited)
Three Months Ended | Year Ended | ||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||
Net income (loss) | $ | (26,816 | ) | $ | 92,015 | $ | 72,322 | $ | (462,866 | ) | |||||||||
Interest income and expense, net | 9,074 | 9,381 | 35,854 | 43,233 | |||||||||||||||
Derivative (gain) loss | 1,556 | (132,614 | ) | (181,860 | ) | 286,049 | |||||||||||||
Income tax expense (benefit) | 943 | (374 | ) | 1,392 | 881 | ||||||||||||||
Depreciation, amortization, and accretion | 19,513 | 19,754 | 77,247 | 86,146 | |||||||||||||||
EBITDA | 4,270 | (11,838 | ) | 4,955 | (46,557 | ) | |||||||||||||
Reduction in the value of inventory | — | 14,367 | — | 21,684 | |||||||||||||||
Reduction in the value of long-lived assets | — | 84 | — | 84 | |||||||||||||||
Non-cash compensation | 1,007 | 1,217 | 3,441 | 3,910 | |||||||||||||||
Research and development | 615 | 175 | 1,923 | 478 | |||||||||||||||
Foreign exchange and other | (1,501 | ) | (831 | ) | (3,229 | ) | (3,786 | ) | |||||||||||
Loss on extinguishment of debt | — | 231 | 2,254 | 39,846 | |||||||||||||||
Loss on equity issuance | 831 | — | 6,663 | 748 | |||||||||||||||
Write off of deferred financing costs | — | — | — | 194 | |||||||||||||||
Non-cash adjustment related to Int'l operations | — | 404 | — | 404 | |||||||||||||||
Brazil litigation expense accrual | — | — | — | 400 | |||||||||||||||
Adjusted EBITDA (1) | $ | 5,222 | $ | 3,809 | $ | 16,007 | $ | 17,405 | |||||||||||
(1) EBITDA represents earnings before interest, income taxes, depreciation, amortization, accretion and derivative (gains)/losses. Adjusted EBITDA excludes non-cash compensation expense, reduction in the value of assets, foreign exchange (gains)/losses, R&D costs associated with the development of new products, and certain other significant charges. Management uses Adjusted EBITDA in order to manage the Company's business and to compare its results more closely to the results of its peers. EBITDA and Adjusted EBITDA do not represent and should not be considered as alternatives to GAAP measurements, such as net income/(loss). These terms, as defined by us, may not be comparable to similarly titled measures used by other companies. The Company uses Adjusted EBITDA as a supplemental measurement of its operating performance. The Company believes it best reflects changes across time in the Company's performance, including the effects of pricing, cost control and other operational decisions. The Company's management uses Adjusted EBITDA for planning purposes, including the preparation of its annual operating budget. The Company believes that Adjusted EBITDA also is useful to investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of companies in similar industries. As indicated, Adjusted EBITDA does not include interest expense on borrowed money or depreciation expense on our capital assets or the payment of income taxes, which are necessary elements of the Company's operations. Because Adjusted EBITDA does not account for these expenses, its utility as a measure of the Company's operating performance has material limitations. Because of these limitations, the Company's management does not view Adjusted EBITDA in isolation and also uses other measurements, such as revenues and operating profit, to measure operating performance. |
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SCHEDULE OF SELECTED OPERATING METRICS
(In thousands, except subscriber and ARPU data)
(unaudited)
Three Months Ended | Year Ended | ||||||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||||||
Service | Equipment | Service | Equipment | Service | Equipment | Service | Equipment | ||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||
Duplex | $ | 6,795 | $ | 964 | $ | 6,486 | $ | 1,343 | $ | 27,367 | $ | 4,911 | $ | 26,990 | $ | 6,199 | |||||||||||||||
SPOT | 8,840 | 1,118 | 7,506 | 1,595 | 33,495 | 5,059 | 29,072 | 6,280 | |||||||||||||||||||||||
Simplex | 2,190 | 1,666 | 2,305 | 1,744 | 9,088 | 5,327 | 8,383 | 6,582 | |||||||||||||||||||||||
IGO | 223 | 226 | 224 | 339 | 799 | 971 | 1,013 | 1,078 | |||||||||||||||||||||||
Other | 709 | 36 | 655 | (104 | ) | 3,375 | 98 | 4,365 | 102 | ||||||||||||||||||||||
$ | 18,757 | $ | 4,010 | $ | 17,176 | $ | 4,917 | $ | 74,124 | $ | 16,366 | $ | 69,823 | $ | 20,241 | ||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||||||||
Average Subscribers | |||||||||||||||||||||||||||||||
Duplex | 76,320 | 66,504 | 72,205 | 75,763 | |||||||||||||||||||||||||||
SPOT | 263,959 | 238,027 | 253,108 | 231,106 | |||||||||||||||||||||||||||
Simplex | 305,467 | 280,616 | 295,363 | 259,260 | |||||||||||||||||||||||||||
IGO | 38,886 | 38,649 | 38,847 | 39,005 | |||||||||||||||||||||||||||
ARPU (1) | |||||||||||||||||||||||||||||||
Duplex | $ | 29.68 | $ | 32.51 | $ | 31.59 | $ | 29.69 | |||||||||||||||||||||||
SPOT | 11.16 | 10.51 | 11.03 | 10.48 | |||||||||||||||||||||||||||
Simplex | 2.39 | 2.74 | 2.56 | 2.69 | |||||||||||||||||||||||||||
IGO | 1.90 | 1.93 | 1.71 | 2.16 | |||||||||||||||||||||||||||
Adjusted (2) | Adjusted (2) | ||||||||||||||||||||||||||||||
Average Subscribers | |||||||||||||||||||||||||||||||
Duplex | 76,320 | 66,504 | 72,205 | 62,433 | |||||||||||||||||||||||||||
SPOT | 263,959 | 238,027 | 253,108 | 231,106 | |||||||||||||||||||||||||||
Simplex | 305,467 | 280,616 | 295,363 | 259,260 | |||||||||||||||||||||||||||
IGO | 38,886 | 38,649 | 38,847 | 39,005 | |||||||||||||||||||||||||||
ARPU (1) | |||||||||||||||||||||||||||||||
Duplex | $ | 29.68 | $ | 32.51 | $ | 31.59 | $ | 36.03 | |||||||||||||||||||||||
SPOT | 11.16 | 10.51 | 11.03 | 10.48 | |||||||||||||||||||||||||||
Simplex | 2.39 | 2.74 | 2.56 | 2.69 | |||||||||||||||||||||||||||
IGO | 1.90 | 1.93 | 1.71 | 2.16 | |||||||||||||||||||||||||||
(1) Average monthly revenue per user (ARPU) measures service revenues per month divided by the average number of subscribers during that month. Average monthly revenue per user as so defined may not be similar to average monthly revenue per unit as defined by other companies in the Company's industry, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company's statement of operations. The Company believes that average monthly revenue per user provides useful information concerning the appeal of its rate plans and service offerings and its performance in attracting and retaining high value customers. |
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(2) During the first quarter of 2014, the Company deactivated approximately 26,000 suspended or non-paying Duplex subscribers. Adjusted average subscribers in the table above exclude these 26,000 subscribers from the prior periods for comparability. | |||||||||||||||||||||||||||||||
Investor contact information: Email [email protected] Phone (985) 335-1538